Russia starts sending oil by train to Iran: sources

MOSCOW: Russia started shipping fuel to Iran by rail for the first time this year, after traditional buyers stopped doing business with Moscow, three industry sources and export data say.

Both Russia and Iran are under sanctions from the West, so they are getting closer to help their businesses and weaken the sanctions, which both Moscow and Tehran say are unfair.

Because of what Moscow calls its “special military operation” in Ukraine, the West has put sanctions on Russian oil products. This has caused the global fuel market to change, with tankers taking longer routes and suppliers picking more unusual places to go and ways to get there.

Iran has had restricted access to markets around the world for many years because of sanctions from the West.

When asked for comments, the oil departments of Russia and Iran did not answer.

Alexander Novak, Russia’s Deputy Prime Minister, said last fall that Russia and Iran would start swapping oil goods, but Reuters sources say that the swap didn’t start until this year.

Two people who knew about the exports told Reuters that Russia sent up to 30,000 tons of gasoline and diesel to Iran in February and March.

A third source stated that the trade happened, but they couldn’t confirm the amounts.

All of the goods came by train from Russia, going through Kazakhstan and Turkmenistan. One of the sources said that some gasoline shipments from Iran were sent by truck to neighboring countries like Iraq.

Iran makes oil and has its own refineries, but a trader in the Central Asian oil products market said that in recent years, Iran’s fuel use has been higher than its fuel production, especially in its northern areas.

Two traders who knew about the situation said that Russia had sent small amounts of fuel to Iran by ship through the Caspian Sea. This was also the case in 2018.

Russian oil businesses are interested in shipping diesel and gasoline to Iran by rail because shipping by sea is expensive and the G7 has put a price cap on it.

The train exports, on the other hand, hit snags along the way, the sources said.

“We think Iran will get more fuel this year, but there are already a lot of trains on the tracks, which makes it hard to move things around. “That might keep exports from taking off,” said one person who knows a lot about shipping to Iran.